I’ve been trading Forex for decades mainly as a hobby (like chess and other games that involve pattern recognition and strategy), never very good at it and still not, but (for the last few years) “consistently profitable”, which is the holy grail of trading for some.
I wasn’t one of the 90-95% who “fail” only because I was never forced to quit (e.g., by betting more than I could afford to lose) and never chose to quit.
My youngest son and I developed a number of reasonably successful bots (automated trading programs) over the years (versus 100’s of failures) and while he still uses them–apparently profitably–a bot is only as good as its programmer/knowledge engineer, in general misses a lot of nuance, and it’s nuance of price pattern that makes it interesting to me as much as making money.
For what it’s worth, psychologically now I think of my trading account no differently that any other foreign currency account with the important exception that it’s subject to margin calls if trades are open :-). In either case I don’t lose sleep worrying about it, but with the trading account may get out of bed in the middle of the night to search charts for evidence of some nuance.
If it helps, in terms of execution my account is not subject to FIFO regulations–huge advantange, worth an offshore account if you live in the U.S.A.–so tend to have a number of long and short positions open simultaneously, total position size in either direction biased in favour of any trend, equal in size or biased to earn net positive swap when nothing is happening–better interest than a bank pays, and with open positions the account is somewhat less likely to be sucked into a black hole in a black swan event.
Entries and targets are based on “best trading practice” involving a couple of basic lagging indicators (Stochastics, MACD), a few informative but untradeable indicators my son and I developed and potentially leading indicators including divergence derived from Stochastics and MACD, support and resistance and Tim Morge’s expanded notion of Median Lines (“Pitch Forks”). No stops to be sacrificed like pawns since simultaneous long and short positions tend to dampen the effect of adverse excursions.
Conceptually I think of the market as a pseudo random walk–pink noise (1/frequency power spectrum)–which is the origin of the phrase “fat tails” in trading and the notion that “the trend is your friend–until the end”. It has to be traded accordingly.
My trading worldview can summed up in two quotes:
Keynes: “[If you bet too big] The market can remain irrational longer than you can stay solvent.”
(Probably) Jesse Livermore: “Price fluctuates.”